Asus 2014 Annual Report Download - page 236

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B. The contractual rights to receive cash flows from the financial asset have been transferred
and the Company has transferred substantially all risks and rewards of ownership of the
financial asset.
C. To transfer the contractual rights to receive cash flows of ownership of the financial asset but
the Company has not retained the control of financial asset.
(11) Lease receivables/ leases (lessor)
An operating lease is a lease that all the risks and rewards incidental to ownership of the leased
assets are not transferred to the lessees. Lease income from an operating lease (net of any
incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease
term.
(12) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the
weighted-average method. The cost of finished goods and work in progress comprises raw
materials and other direct/indirect costs. It excludes borrowing costs. The item by item approach
is used in applying the lower of cost and net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business, less the estimated cost of completion
and applicable variable selling expenses.
(13) Investments accounted for under equity method / subsidiaries and associates
A. Subsidiaries are all entities over which the Company has the power to govern the financial
and operating policies. In general, control is presumed to exist when the investor holds,
directly or indirectly through subsidiaries, 50% or more of the voting power of the investee.
Investments in subsidiaries are accounted for under equity method.
B. Unrealized gains on transactions between the Company and its subsidiaries are eliminated to
the extent of the Company’s interest in the subsidiaries. Accounting policies of subsidiaries
have been adjusted where necessary to ensure consistency with the policies adopted by the
Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in
profit or loss, and its share of post-acqusition movements in other comprehensive income is
recognized in other comprehensive income. When the Company’s share of losses in a
subsidiary equals or exceeds its interest in the subsidiary, the Company should continue to
recognize losses in proportion to its ownership.
D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing
control of the subsidiary (transaction with non-controlling interests) are accounted for as
equity transactions, i.e. transactions with owners in their capacity as owners. Any difference
between the amount by which the non-controlling interests are adjusted and the fair value of
the consideration paid or received is recognized directly in equity.
E. When the Company loses control of a subsidiary, the Company remeasures any investment
retained in the former subsidiary at its fair value. Any difference between fair value and
carrying amount is recognized in profit or loss. All amounts previously recognized in other
comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the